PTTEP NL is a subsidiary of Thailand's PTT Exploration and Production, and Statoil a world leader in heavy oil and deep water exploration and production.

PTTEP chairman Prasert Bunsumpun said it is the biggest investment the Thai firm has made, amounting to US$2.28 billion in total. The Thai oil firm has another large investment, the "M9" project in Myanmar, worth some $2 billion.

According to PTTEP president and chief executive officer Anon Sirisaengtaksin, the transaction will be completed through the purchase of 40 per cent of the partnership units of Statoil Canada Partnership (SCP). Half of the transaction has been completed, while the other half will be closed gradually next year.

Mr Anon said about $1 billion will be invested from PTTEP, and $500 million will be from loans provided by a foreign bank, with a loan contract to be signed next week, and $800 million will be in US dollar-denominated bonds.

According to the PTTEP website, KKD is a significant oil sands deposit in Canada covering an area of 257,200 acres with an estimated 4.3 billion barrels of recoverable bitumen resources.

It is expected that production of heavy oil for commercial purposes can start early next year and the product of the KKD oil sands project will be sold to refineries in the United States. In this regard, crude oil of 10,000 barrels daily is expected to be produced, with the volume of crude oil to increase to 400,000 barrels per day in the future.

As oil resources are costly and difficult for drilling exploration and petroleum development, and as world oil prices are on a rising trend and natural reserves have much been used, investment in oil sands has become more attractive.

In the long run, additional potential markets for KKD’s heavy oil product is expected to develop in the US Gulf Coast region, and potentially to the Canadian West Coast where heavy oil product could access Asian markets, as stated on the PTTEP website.

PTTEP chairman Prasert said that Statoil had chosen PTTEP as its partner because of the Thai firms clarity in its investment plan. The companies have similar development strategies and once developed a drilling exploration together at the Bongkot Gas Field in the Gulf of Thailand.

Sixty-seven per cent of Statoil's shares are held by the Norwegian government. The company is the second largest company refining oil sands following Saudi Arabia.

PTTEP will sign another agreement for its partnership with Statoil early next year in order to study and explore together other potential natural resources. (MCOT online news)